Aon Benfield has identified seven emerging risks that, it said, present reinsurers with business opportunities over the next five to 10 years.
The seven key emerging risks identified by the report comprise:
1. U.S. mortgage credit: Freddie Mac and Fannie Mae are transferring U.S. mortgage market risk in a series of reinsurance transactions, with the potential demand for $6 billion of reinsurance limit annually.
2. Sharing economy: With individuals renting out personal assets for money in direct competition with established businesses like hotels and taxis, coverage gaps highlight an immediate opportunity for reinsurers to offer policies that span personal and commercial exposures.
3. Reputation and brand: The top risk identified by the 2015 Aon Global Risk Management Survey.
4. Microinsurance: Offering access to four billion potential new customers, and with opportunities for long-term growth, as developing economies gradually become more affluent.
5. Corporate liability: Opportunities for reinsurers to provide cover for giga losses, which require more than $1 billion of reinsurance limit.
6. Terrorism: Leveraging military-based technology to better understand this risk and improve model competencies, such as accounting for factors that mitigate blast zone damage.
7. Cyber risk: As data and analytics improve, Aon forecasts that cyber risk will move from complex and undermanaged into the insurance mainstream, where markets can adequately price and transfer risk.
Stephen Mildenhall, the chief executive officer of Aon Analytics, explained, “Risk owners are demanding new solutions for these emerging risks as they work to grow their businesses. This in turn represents opportunities for international insurers to grow through increasing the relevance of their insurance products. By investing in data and analytics, insurers will be able to grasp the potential around growth, geographic expansion, and market feasibility.”
Learn more: http://www.aon.com/.